Part 2 Business Plan

CONFIDENTIAL

[Dave and Jacky Delicious Incorporation]

Business Plan

Prepared May 17th, 2020

Table of Contents

Executive Summary 1

Opportunity 1

Expectations 1

Opportunity 3

Problem & Solution 3

Target Market 3

Competition 3

Execution 4

Marketing & Sales 4

Operations 4

Milestones And Metrics 5

Company 6

Overview 6

Team 6

Financial Plan 7

Forecast 7

Financing 9

Statements 10

Appendix 13

Profit and Loss Statement 13

Balance Sheet 15

Cash Flow Statement 17

Executive Summary

Opportunity

Problem Summary

INSTRUCTIONS: Describe very briefly why your business needs to exist. What problem do you solve for your customers?

Solution Summary

INSTRUCTIONS: Briefly summarize what your company does. The executive summary should be very short and you can go into more detail later in the plan.

Market

INSTRUCTIONS: Describe your target customer or market segments. Again, keep things very brief in the executive summary and add more detail later in the plan.

Competition

INSTRUCTIONS: Summarize your key competition. Who will your customers also consider?

Why Us?

INSTRUCTIONS: Write a brief overview of you and your team. Why are you the right people to build this business?

Expectations

Forecast

INSTRUCTIONS: Write a brief overview of your financial targets. How much do you plan to sell in the next year? What are your long-term sales goals?

Financial Highlights by Year

INSTRUCTIONS: Insert a chart of your key financial metrics here. Tools like ​LivePlan​will do this for you automatically.

Financing Needed

INSTRUCTIONS: If you are writing a business plan to raise money for your business, include a brief summary of what you are looking for. If you aren’t raising money or getting a loan, you can delete this section.

Opportunity

Problem & Solution

Problem Worth Solving

INSTRUCTIONS: Write a little more detail than you provided in the Executive Summary about

the problem you are solving. What do your customers need? Do they need a better product, a

cheaper product, or just a store in a better location? Describe why customers will want to buy

from you.

Our Solution

Dave and Jacky Incorporation will primarily produce and sell a variety of hamburgers. It will also

offer sauces, coffee, tea, desserts, and juice fruits. The company will produce meat burgers (To Yuma

Deluxe) and vegetable burgers (Saddles deluxe). The company’s signature dish will be a 4 oz of locally

100 percent grass fed beef meat burgers. These flame-kissed products will be smothered in nacho cheese

for mouthwatering flavor and accompanied by a ripe slice of fresh tomatoes from local farmers. The

hamburger will be gently caressed within pretzel bread. For vegetarians, Dave and Jacky will offer them

with saddles deluxe, a 100 percent vegetable hamburger. This 5 Oz bean patty will be infused with

seasonal vegetables and dusted with paprika. Saddle deluxe is a slab of vegetable pepper jack cheese and a

slice of local fresh tomato that is penetrated by golden pretzel bread.

Currently, the nearest specialized hamburger restaurant is nearly one and a half miles away from

Dave and Jacky Incorporation intended location in the Cambridge area, Massachusetts. Nonetheless, there

are other corporate run franchises located near the company’s intended location that also include

hamburger among other products or menu items. Even so, the quality of their products does not match

Dave and Jacky’s product offerings. Nonetheless, the company considers them as its rivals because they

offer low

prices for lower quality hamburgers and are located within a one and a half mile radius from its location.

For competitive advantage, Dave and Jacky Incorporation will rely on better quality and specialized

products, state of the art equipment, better location, faster service, skilled manpower, and better recipes.

The company will offer high quality products at an affordable price and will serve it hot on time to a

customer’s door. In essence, Dave and Jacky is a concept developed out of the desire for an alternative to

corporate based fast food franchises. It focuses on convenience, availability, and sustainability. The aim is

to serve simple menu made of fresh, local ingredients. The company will source the best ingredients from

local suppliers and make everyone a happy customer.

Target Market

Market Size & Segments

INSTRUCTIONS: Describe your key customers – who they are and what their key attributes are.

If your company is targeting multiple customer groups (also called ‘segments’), describe each

group here. If you can, include details about how many people are in each segment and how

large the total market is.

Competition

Current Alternatives

INSTRUCTIONS: Describe your current competition. What products and services are people

using instead of yours?

Our Advantages

INSTRUCTIONS: Explain why your product or service is better than the others. Also, be sure to

describe any competitive advantages you may have, such as a patent or other unique component

to your business.

Execution

Marketing & Sales

Marketing Plan

INSTRUCTIONS: Explain how you plan on getting the word out about your product to your

target market(s). Will you use advertising? Perhaps you are developing a content marketing

strategy. Whatever your marketing plans may be, describe them here.

Sales Plan

INSTRUCTIONS: If your company relies on sales people to close sales deals, you need a sales

plan. Your sales plan should explain how you convert people who express interest in your

product or service into paying customers. If you are opening a food truck, this section is less

important and you can consider removing it. However, if you are starting a sales-heavy business

like enterprise software or a car dealership, then you need to document how you will nurture

leads and close deals.

Operations

Locations & Facilities

The company will lease a commercial property in Cambridge Area, Massachusetts in September

2020 for five years, with the option of extending the lease period for another five years. Since the

company will leverage supplier’s logistics, it will not acquire delivery vans for distribution purposes.

Nonetheless, it will require office supplies such as desks, chairs, and office stationery.

Technology

INSTRUCTIONS: Describe any important software, hardware, or other information technology

that you use now or plan to use later to operate your business. That might include a point-of-sale

system to take payments, an e-commerce engine for your website, a CRM solution for managing

 your pipeline, marketing tools for generating leads, and so on.

Equipment & Tools

After taking six months looking for a convenient area, the owners decided to rent a commercial space

in Cambridge, Massachusetts. The capital will be used to acquire kitchen equipment, inventory, legal fees,

packaging and other materials, rent, advertisement, inventory on hand, and legal expenses as indicated in

table 1.

Kitchen inventory will consist of necessary tools and accessories required for hamburger production and

service facility. They include:

● Utensils such as cooking utensils, cutting guide, and rocker knives as well as wheel cutters

● Food preparation attire and equipment such as aprons, gloves, blender, trays, mixers, and storage

containers, condiment bottles, tableware, glassware, pans, and cleaning equipment and supplies.

● Burger tools such as hamburger press burger maker, meat tenderizer pounder, meat grinder, burger

cookbook, salt and pepper mill duo, pocket thermometer, burger seasoning, BBQ spatula, and

griddle pan.

Kitchen equipment comprises a hamburger oven, burger bun machine, hamburger display equipment,

cooler package, and refrigerators. Seventy five thousand worth of long term assets will be bought over the

next three years, using a straight line method of depreciation. A list of equipment to be bought, including

prices and terms of acquisition, will be availed for investor’s consideration. Dave and Jacky

Incorporation’s policy is to buy state of the art equipment from reliable dealers in the food industry.

Other equipment consists of neon hamburger signs, juice dispenser, dish machines, coffee makers and

filters, and tea dispensers as well as cleaning equipment.

Inventory on hand during the start up phase include key ingredients for preparing hamburger, wheat

flour, spices and burger condiments, juices, coffee, tea, and sauces. Others include cookie dough, meat,

bread,

and dessert items. Inventory on hand also includes supplies used during packaging, delivery processes, and

sales. There are several United States based producers and suppliers of hamburger equipment. The

company will choose specific suppliers through a competitive bidding process. The selected manufacturers

must be able to produce and supply quality, energy efficient equipment at an affordable price.

Insurance premium for risk coverage is established at $2,000 for the first 6 months, and will be

negotiated with the insurer. The company will pay monthly premiums through direct debits. Advertising

expenses are estimated at $2,000 per annum and will be used for marketing information materials. Legal

expenses will include business formation, contract reviews, and business advice. Most importantly

businesses must have permits in order to operate legally in the Cambridge area, Massachusetts.

Milestones & Metrics

Milestones

INSTRUCTIONS: List your key milestones and the dates that you hope to accomplish them by. If you’ve already accomplished key goals for your business, list them here as evidence that your business is getting traction – in other words, it’s getting positive attention from potential customers.

Key Metrics

INSTRUCTIONS: Explain which performance metrics are most important for understanding how your business is doing. What does success mean for you, and how will you know it when you see it?

Company

Overview

Dave and Jacky Delicious Incorporation is a privately held limited liability focused on fast food

production and delivery service. Based in the Cambridge area, Massachusetts, this is a family owned

business, managed by Dave Simpson (myself) and my sister Jacky Simpson. Dave and Jacky

Incorporation is a take away restaurant where clients order food at the counter. It is not a sit down

restaurant that offers table service. The company aims to meet customer expectations for exceptional

quality hamburger delivered in a friendly manner. The entity will serve a 20 mile area with at least 1

million residents, and one of the fastest growing populations. The business’ location provides high

visibility and large traffic of customers. Dave and Jacky are aware that it cannot rely on price alone for

competitive advantage, thus the need to focus on customer expectation.

The company will also focus on its core competencies to determine expectations it can reasonably

meet and ensure that it exceeds such expectations wholeheartedly. Hence, Dave and Jacky will rely on

maintaining and increasing customer satisfaction levels for future growth and development. The delivery

process will be carried out through various food catering online services with excellent references in the

Cambridge area. The business can opt to be one of their major suppliers. By doing so, the company will

not only leverage its partner’s high internet connectivity and exposure, but also save on logistics cost.

Moreover, the business will not buy delivery vehicles because delivery entities will use their own delivery

vans.

During its formation Jacky and I plan to contribute $40,000 each and raise $20,000 from an investor.

In total, the contributed capital would amount to $100,000. In return for investing $30,000, the investor

would control 20 percent of the company ownership. The investor would take part in significant decision

making

such as management, production, and dividend policy before the company’s begins operation. Other issues

worth discussing include: investor’s interest, investor entry, and investor exit strategy before beginning

operations.

Team

Management Team

1. Jacky Simpson

Jacky Simpson will be the chief executive officer of Dave and Jacky Delicious Inc. Jacky has

successfully owned and managed a similar business in Los Angeles, California. She holds a Masters

degree in hospitality management and has more than 10 years working experience in the industry. She

worked as a food production manager at Saussy Restaurants for 5 years before becoming the

organization’s chief executive officer for 2 years. He has, during the last 3 years, operated a take-out food

outlet in Los Angeles, California.

2. Dave Simpson

I will act as the company’s human resource manager. I have more than 6 years working experience as

a human resource manager in different industries including hospitality industry and telecommunication

industry. I have a post graduate degree in human resource management. The company will hire an

accountant to oversee the organization’s financial responsibilities and performance.

The management is expected to utilize the company’s resources effectively, operate profitably, and

abide by relevant state laws and regulations. The management philosophy is anchored on team work,

integrity, responsibility, as well as mutual respect. Individuals would want to work at Dave and Jacky

Incorporation because the company encourages creativity and innovation, embraces diversity, employee

growth, and performance.

Advisors

Investor

It is pertinent to ensure that before incorporation the company must raise adequate capital.

Thus, an investor is essentially an important aspect for the company. The investor has a

significant role to play as he or she will generate capital for the company. Specifically, the

investor will provide $20,000 needed to build and grow the business. These funds will cover

various expenses including marketing, overhead costs, product development, as well as other

resources needed to increase revenue.

Legal Advisor

The legal advisor will help the owners establish a clear relationship with one another. It is

important to make clear deals with co-owners, contractually, in order to avoid future conflicts. A

legal advisor can help establish roles and responsibilities of owners and investors, remuneration,

percentage of ownership in a company, and cash contributed by owners. A legal advisor will also

play a major role in establishing the business structure or model. Getting legal advice can help

owners understand the benefits and shortcomings of a private limited liability company and align

their goals with the company. In Addition, the legal advisor will offer advice about intellectual

property protection, developing a standard contract document, and tax issues.

Accountant

For organizations, finances are complex and confusing. In this regard, Dave and Jacky

Delicious Incorporation will seek the services of an accountant to manage the company’s

financial records, transactions, and accounts. Taxes present significant pain for start-ups,

especially due to ever changing taxation laws. There are many variables from business

registration to type of deductions that an organization makes. As the company’s financial

strategy becomes more complicated, it will be important to employ an accountant to align the

organization’s taxation process. An accountant will also prepare payroll, ensure accuracy of

financial documents, prepare and maintain financial reports, provide guidance on cost reduction,

offer guidance on revenue growth and profit maximization. The accountant will also conduct

forecasts and risk analysis assessments.

Start-Up Summary

It is estimated that the company will require $135,000 in start-up cost, out of which owners and

investors will contribute $100,000. Jacky and I will provide more than 50 percent of total start up cost. In

in particular, we will contribute $80,000, each contributing $40,000. An investor is welcome to take part in

the organization’s capital by contributing $20,000 and would be offered 20 percent ownership of the company

capital. The investor’s fund will be used to purchase equipment and cater for part of start up costs. For the

remaining $35,000 additional funding required to cover start up cost, Dave and Jacky plans to apply for a

five year loan to meet cash flow requirements. The company will use the borrowed money to purchase

equipment based on a list that the company will supply to the lending organization. The loan will be repaid in equal

monthly installments for a five year period. For conservative reasons, the company estimates its annual interest to

be 12 percent. Nonetheless, it will negotiate actual interest rate and borrowing terms with the lending institution.

​Start-Up Funding

Start-Up Cost

Expenditure Amount Kitchen inventory $7,000 Packaging material $2,000 Kitchen equipment $25,000 Insurance $2,000 Legal fees $1,500 Rent $5,000 Promotion $2,000 Other equipment $4,000 Business sign $2,000

Permits $1,000 Office supplies $1,500 Others $2,0 00 Total Expenses $55,000 Assets Cash $15,000 Start up inventory $15,000 Current assets $10,000 Long term assets $40,000 Total start-up cost $135,000

Financial Plan

Forecast

Key Assumptions

INSTRUCTIONS: Describe how you came up with the values in your financial forecast. Did you project your revenue based on past results, market research, your best guess at how many people who visit your store and what percentage of them might buy, or some other method? What kind of growth are you assuming? What are your key hires and notable expenses? What level of profit do you expect to generate?

Revenue by Month

INSTRUCTIONS: Include a chart that shows your projected revenue. A tool like ​LivePlan​can help you create a chart like this and automatically include it in your business plan.

  Expenses by Month

INSTRUCTIONS: Include a chart that shows your projected expenses. A tool like ​LivePlan​can helps you create a chart like this and automatically include it in your business plan.

Net Profit (or Loss) by Year

INSTRUCTIONS: Include a chart that shows your projected expenses. A tool like ​LivePlan​can help you create a chart like this and automatically include it in your business plan.

Financing

Use of Funds

INSTRUCTIONS: If your forecast includes loans, investments, or other financing, use this space to explain what you plan do with that money.

Sources of Funds

INSTRUCTIONS: Describe your financing plans. Are you investing your own money in the business? Do you have a credit card or line of credit? What other types of funds — personal or business loans, equity investments from others, etc. — do you expect to receive and when? If you do not have the full detail of future financing worked out yet, that is understandable. Just explain what you do know and when you expect to sort out the details.

Statements

Projected Profit & Loss

INSTRUCTIONS: Provide a summary of your financial forecast here. You can certainly do this by yourself, but tools like ​LivePlan​make it much easier.

FY2018 FY2019 FY202

0 Revenue

Direct Costs

Gross Margin Gross Margin % Operating Expenses

Salary Employee Related Expenses

Total Operating Expenses

Operating Income

Interest Incurred Depreciation and Amortization Income Taxes Total Expenses Net Profit Net Profit / Sales

  Projected Balance Sheet

INSTRUCTIONS: Include your balance sheet here. FY2018 FY2019 FY202

0 Cash Accounts Receivable Inventory Other Current Assets Total Current Assets

Long-Term Assets Accumulated Depreciation Total Long-Term Assets

Total Assets

Accounts Payable Income Taxes Payable Sales Taxes Payable Short-Term Debt Prepaid Revenue Total Current Liabilities Long-Term Debt

Total Liabilities

Paid-in Capital Retained Earnings Earnings Total Owner's Equity

Total Liabilities & Equity

Projected Cash Flow Statement

INSTRUCTIONS: Include your cash flow statement here. FY2018 FY2019 FY202

0 Net Cash Flow from Operations

Net Profit Depreciation and Amortization Change in Accounts Receivable Change in Inventory Change in Accounts Payable Change in Income Tax Payable Change in Sales Tax Payable Change in Prepaid Revenue

Net Cash Flow from Operations Investing & Financing

Assets Purchased or Sold Investments Received Change in Long-Term Debt Change in Short-Term Debt Dividends & Distributions

Net Cash Flow from Investing & Financing Cash at Beginning of Period Net Change in Cash Cash at End of Period

  Appendix

Profit and Loss Statement (With Monthly Detail) FY2018 Mar

'17 Apr '17

May '17

Jun '17 Jul '17 Aug '17

Sep '17 Oct '17

Nov '17

Dec '17

Revenue Direct Costs

Gross Margin

Gross Margin %

Operatin g Expenses

Salary

Empl oyee Relat ed Expe nses

Total Opera ting Expen ses

Operatin g Income

Interest Incurred

Depreciat ion and Amortiza tion

Income

Taxes Total Expenses

Net Profit

Net Profit / Sales

Profit and Loss Statement (Annual Detail)

FY2018 FY2 019

Revenue Direct Costs

Gross Margin

Gross Margin %

Operating Expenses Salary

Employee Related Expenses

Total Operating Expenses Operating Income

Interest Incurred

Depreciation and Amortization

Income Taxes

Total Expenses

Net Profit

Net Profit / Sales

Balance Sheet (With Monthly Detail) FY2018 Mar

Apr'17 May '17 Jun'17 Jul'17 Aug'17 Sep'17 Oct'17 Nov'17 Dec'17 Jan'18 Feb'18

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Prepaid Revenue

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Earnings

Total Owner's Equity Total Liabilities & Equity

Cash Flow Statement (With Monthly Detail) FY2018 Mar

Apr'17 May '17 Jun'17 Jul'17 Aug'17 Sep'17 Oct'17 Nov'17 Dec'17 Jan'18 Feb'18

N e t C a s h F l o w f r o m O p e r a t i o n s

NetProfit

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Cash Flow Statement (Annual Detail)

FY2018 FY2 019

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Depreciation and Amortization

Change in Accounts Receivable

Change in Inventory

Change in Accounts Payable

Change in Income Tax Payable

Change in Sales Tax Payable

Change in Prepaid Revenue

Net Cash Flow from Operations

Investing & Financing Assets Purchased or Sold

Investments Received

Change in Long-Term Debt

Change in Short-Term Debt

Dividends & Distributions

Net Cash Flow from Investing & Financing

Cash at Beginning of Period

Net Change in Cash

Cash at End of Period